welcome to today's "worldwide exchange." ross westgate is away.

i'm kelly evans. these are your headlines from around the world. a new chief executive after dropping profit. but cnbc reports the leadership change isn't related to the results. >> this is a process that started years ago. happens to coincide here today with a weaker pricing environment. but two totally unrelated events. teleco stocks on the move. kpn's $4 billion capital raising plan is backed. full year earnings below expectations. and comedian-turned-politician says his moving is unstoppable. in an exclusive interview, he says italians need to step aside. the rush to set up shop in china is down. the fastest decline in more than three years in january.

okay. lots happening on the program today including a grew interviewer coming up. we'll be counting down to the bank of england minutes after andrew bailey is to lead the new banking regulation unit. the minutes will be out in a half-hour's time. we'll bring those and u.k. unemployment figures. the central bank watch extends overseas as investors stand by for minutes from the federal reserve's latest meeting. they're due out later this afternoon in the u.s. will the fomc offer clues on an end to qe3? we're joined at 11:30 to weigh in. with india's government clouded in corruption allegations, we'll speak to one of the country's wealthiest individuals and what it means for business. billionaire udai kotak joins us

in 20 minutes' time. plenty coming up including sony which is heading to the bill apple for a major on, national endowment. will the game console giant take the wraps off its rumored playstation? expert analysis at 11:20 cet. and bhb bulletin has posted a steep fall in earnings for the first time in the year. the australian mining giant announced change at the top after the 43% drop in profit. we have more on this report from sydney. >> reporter: the surprise at bhp, billiton's ceo mariu marius kloppers announcement coming earlier than expected. >> coincided today with a weaker pricing environment. but two totally unrelated events. >> reporter: he will be replaced by andrew mckenzie, current head of bhp's middles division. he's well regarded in the industry and says don't expect a change in strategy. listen in. >> there's lots of things that

are great about this company. i have no intention of changing. we have a fabulous strategy that's served our shareholders extremely well. you've heard from jack and marius about that. i am going to continue this momentum that we've built together to put a sharper focus on the execution of that strategy. >> analysts welcoming his experience in oil and gas saying that's key given a forecast drop in iron or e demand. they report a drop in profit to $5. billion after $3 billion in writedowns on its aluminum and nickel businesses. on the upside, executives are looking for demand to improve over the next 12 months. shares finished almost 1% down. back to you. joining us is john meyer, analyst from s.p. angel. welcome. >> good morning. >> bhp's results, your take?

>> well-crafted statement. i think a very good move to bring in andrew mckenzie at this point in time. it's quite defensive, it says we're going to focus more on the petroleum division. that's kind of a bedrock for the business. where its as iron ore and other commodities are more dependent on what goes on in china. of course, nobody's got control of that. with the new chinese leadership in place, there is some uncertainty as to how aggressive they're going to be on their france spending and that sort of -- infrastructure spending and that sort of thing. they'll carry on growing infrastructure within china, but at a slower rate. >> what's interesting is to look at the results today which fell on weak iron ore prices. they bottomed in september and are up now. expecting a price of $140 to $130 a ton. what's your view, and is bhp going to be successful in diversifying their business if they don't set a target to make

the oil/petroleum unit one of the world's biggest? >> there's nothing low about iron ore prices now. they're quite high. they're not as high as they were last year, they were at exceptional levels until midway through last year when they started coming off. still very good levels, probably unsustainable in the longer term. we would expect to see prices come down by maybe 1/3, for example. that will not back profits of the division. iron ore is still bhp's biggest profit area. and other businesses, for example aluminum are showing writedowns as with rio tinto not going so well. meantime, the petroleum division continues to run quite well. good oil production but a disappointment on the natural gas production side of things. i think they need to work on that business. let's not forget that bhp is differentiated from the other minors by its oil business. rio tinto, extrata, they don't

have that business. >> rio tinto down 1%, bhp down .9%. a little different revenuation. despite -- despite bringing on andrew mckenzie, if iron prices will fall by 1/3, you can't recommend bhp, can you? >> it's well diversified and a sol solid business. they will increase iron ore. we wouldn't expect another $4 billion, $5 billion profit from the iron ore business. that's likely to come down a bit. the other business of looking fairly strong, bhp is a well-managed company, no doubt about that. >> we've seen so much management turnover, not just at bhp but at several mining companies. take a listen. we've spoken with the ceos outgoing in some cases, incoming ceos of mining companies in the last week or two. here's what they generally said about management transitions. >> we know that the world has

become a more volatile place. we recognize that since the gfc, we've seen gyrations in economies that we wouldn't have ever seen before. >> there have been challenges, but changing regulatory environments in emerging countries are not easy. and i think we understand that, and we've gotten through the worst. >> there used to only be one regulator that applied territory to the deal, now there are many. hurdles are increasing. >> are we through the worst? >> yeah. i think we are actually. i think there's quite a lot going for the sector now. i think currencies may well provide boosts for this year. commodity prices look relatively stable. yes, we'll see some volatility in iron ore, but i think coal prices should start to recover. and there's a whole raft of other commodities that are looking solid now. it's not looking like a bad outlook. i still think we'll see pretty good earnings numbers from these companies. >> so your favorite picks?

>> i'm going for reo tinto. i'm backing sam walsh. he's proven expertise in holding down costs in iron ore. he will, play that across the world. he's universally popular in the industry. >> any prospect for major m&a? >> american is a target out there, the $20 billion market cap. it's easy for others to buy. mick davis will be on the street looking for something to do. i'm sure he's got lots of plans. i'm sure he'll start his own business well backed by financial institutions. we haven't seen announcements. watch the space. >> we will indeed. john meyer, we will have you back to watch it with us. analyst from s.p. angel on set. thank you very much. in markets, quick movers -- the largest cement maker is near the top of the stock 600 after swinging back to profit in the

fourth quarter. different story for lufthanza, shares down 5.5% on the back of the airline scrapping dividends and going forward with a $9 -- 9 billion euro order for plans. france telecom reported slowing earnings broadly in line with analysts at citi's expectations. trade's been volatile. shares fractionally lower. let's check the broader landscape. two european markets are a little higher. xetera dax adding .3 after a strong performance yesterday on the strong zew survey. bond rates, we haven't seen as much focus on the space. it tells you something. the ten year in spain, 5.15%, under 4.4 for italy ahead of the elections on sunday. over to forex, the euro yesterday was initially stronger. gave up ground. today, adding .2% to 134. the yen giving up another .3%, heading back toward the 93 level. for more let's check in with li from singapore.

>> reporter: thank you. asian shares climbed to the highest level in 1.5 years on an improving global outlook. the nikkei managed to close at a 52-month high despite a record trade deficit in january. investors are still awaiting the decision for the next boj chief. toyota shares gained 1.7% after thenique reports. the carmaker will ramp up production in april by 10% on expectations of higher domestic sales and more profitability due to a weaker yen. japan tobacco lost 1% an reuters reports the japanese government will begin selling its shares of the company in the next few days. the mainland china markets rebounded from losses over the past two sessions. investors are looking for policy cue s in the upcoming sessions f the national people's congress and the chinese people's political conference in march. environmental stocks surged on hopes of more government supported. local meadad say china will invest over $56 billion to

control air pollution by 015. -- 2015. shares in hong kong also finished in positive territory. gaming stocks fell after reports say gambling revenue will be weak in february. elsewhere, south korean automakers' technology shares and n brokerages led the rally on kospi ending higher by 2%. and the esx 200 hit a fresh 4.5-year high helped by gains in banks. the major minors ended weaker after bhp reported a sharp rise in costs. sensex trading higher by a modest .1%. back to you. >> thank you very much for that. we'll check back again in just a little bit. kpn shares, want to draw your attention, down almost 7% this morning. this after carlos slim's company and one of its biggest shareholders approved a capital raise. investors, though, generally looking at the company and say figure it needs a capital raise, potentially the business is in worse shape than previously thought.

giving up almost 7% today. we'll keep an eye on that throughout the morning. italy's caretaker mario monty has come out swinging against silvio berlusconi saying he didn't keep promises he made in the past and that someone else could govern well. this comes as the outspoken comedian-turned-politician whipped a crowd into a frenzy in milan. julie is in milan. in fact, she was at the rally. what was it like? >> reporter: it was incredible. some of the estimates suggest up to 100,000 people here. this square behind me was absolutely packed. and i have to admit he was treated like a rock star. they made a human chain to get him to the stage that was on my right. the press, italian press, literally mobbed hip as he got out of his camper van. he's on his tsunami tour, he

calls the process of the rallies he's been going through. in direct contrast, i have to say, to the rally that we saw earlier which was far more sedate and far fewer people. he really is managing to monopolyize on this -- monopolize on this austerity and i don't think we can discount how much this has gripped in some ways like greece, for example. reminded me of the second election and seeing the support. so you can ride that wave a long way. now, when i spoke to him yesterday, i asked whether he'd managed to monopolize on the corporate scandals and whether that and the political fallout has to get worse before it gets better. listen to what he had to say. >> translator: this country is falling down like a house of cards. this is the biggest financial scandal in the history of the republic. everyone from the upper echelons

of government are involved. all political parties are volv they've tried to cover it up with misleading information, misleading news. in this country the media is has conclude colodue -- colluded with the government. it's coming down, and we have to rebuild from scratch. we need to start with those people who can no longer live in the situation, w a salary for citizens. we must immediate help the small and medium enterprises. we're running out of time. >> reporter: all the other parties seemed to attack it, do you think they're scared? >> translator: yes, they're out of the game. they belong to history. they have television studios where they go because the journalists that interviewer them work for those parties. they cannot put their noses outside. they live in a parallel dimension like a "truman show." they realize citizens have turned their back on them. like the old fascist officials that would go on saying bring out armies here and there, when in reality the armies had ceased

it exist. these parties are like old actors acting before an empty theaterment they're the past. in six months we will not even remember them. >> reporter: do you think that if you don't win this election and somebody else forms a coalition we'll actually have to go back to the polls again in a few months' time? >> translator: absolutely, yes. it's only a matter of time. either they give up now or give up in six months. one year at the most. no government could rule a country in ruins. most certainly those who reduce it to ruins cannot be allowed to govern it. we guarantee we will fill a void. in other countries this void is filled with fascists, by the pen in france, the party in hungry, greece. we are keeping people calm. these parties need to understand that it is over for them. >> reporter: now, grillo's effectively ruled himself out of power saying on no account would he form a coalition or what the likelihood is.

we're looking at a coalition between mario monty centrists and the center left party of basani. that's where the ultimate question mark remains just how stable is a coalition that they can form. do think it's interesting. in the papers today, suggesting that blackrock will send a convoy here to talk to pollsters to assess the risks surrounding this election. perhaps the concern that we've been talking about over the last few days reflected at least in the front end of the italian move over the last couple of days. for now, back to you -- actually, i want to mention one thing. we are actually going to be talking exclusively to the ceo to get an idea of the business environments and what they're thinking here post this election versus, of course, the politicians that we've been speaking to for the last few days. wanted to mention that at the end there. >> perfect. that interview will be coming up on european closing bell. great to see you. more from julia later on in the program. india is facing an economic slump that's meant its top growth pace has cooled, and so

are businesses feeling the chill. coming up, we'll speak to one of india's wealthiest individuals, udai kotak live from mumbai. we'll be right back. great, everybody made it. we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.

welcome back to the program. china's reputation as the world's factory remains in dispute as the country's foreign direct investment dropped .3% on the year in january, coming in at over $9 billion. in 2012, china's full-year fdi hit nearly $112 billion although it was shy of the $120 billion target. it was also the first annual drop in three years. meanwhile, japan's trade deficit hit a record $17 billion in january. to put that into context, exports climbed 6.4%, the first gain in eight months. imports rose at a faster pace, up 7.3% from a year ago. the weaker yen is a double-edged sword. while it makes japanese exports more effective it costs the costs of import which are largely priced in dollars. french bank agripol posted the loss of 6.5 billion euros. the sharpest loss since the bank

went public in 2001. they've added 3.7%, and stephan has more from paris. it's extraordinary that the company is doing worse in 2012 than during the financial crisis. >> reporter: yes, absolutely. but the bank believes that the worst is not over. it has turned the page and that's the reason the stock is performing well this morning. credit agricole will reveal the restructuring plan after the summit. there's not much details, but we're expecting the bank to cut its expenses. that's precisely what other banks have been doing in recent weeks. bnp parabas said they would reduce the cost base by $2 billion over the next three years. and societe generale simplified its structure in order to reduce its cost base. that's precisely what we're expecting from credfrom societe

generale. the rate was at 9.3% at the end of basal 3. they will improve without any capital increase. that also from a market point of view was a positive announcement from credit aricole. the loss was wider than expected because of a significant charge on the former greek unit, on the italian unit, on the portugal unit and the tax change on the sale of its greek unit. that was not planned. that's the reason why the loss was wired than expected in the fourth -- wider than expected in the fourth quarter. that's over, what the ceos say this morning. the bank has transformed itself and will announce a plan in september. the share price up nearly 4%. >> thank you very much for the background on that. investors today are putting that toward the top of the stock 600.

in fact, the fourth best performer on the day, credit agricole up 4.1% despite the writedown. we mentioned that foreign direct. in in china had fallen. we're also getting -- foreign direct in china had fallen. we're also getting that they will have expanded property tax trial and implement property purchase limit. the shanghai composite addi adding .6% today, nearly 2,400. it was below the 2000 level last fall when iron ore prices bottomed out adding 18% over the past three months. china will take additional measures to curb property speculation. in india, trade unions have begun a two-day strike in protest against the government's economic reforms. nearly a dozen unions plan to block transport links and disrupt state-run bank. the strikes come as the government aims to revive a flagging economy and avoid the threat of a down grade for india's credit rating. joining me exclusiveliy is uday

kotak, managing director at kotak ma hintdra bank. thank you very much for joining us. we understand you had an investment conference drawing people from around the world. we're also learning that investment into china is falling. do you think global investors see india as the new china here? >> i think that would be little bit of a stretch, but india's just about a week away from a budget which is a crucial budget. and the finance minister has promised to control the budget deficit down to 5.3% and going down hopefully into the next year at 4.8%. we hope there will be easing of monetary policy in march to revive the investment cycle. the current gdp growth estimate is around 5% to 5.5%. and india's working hard to try

and stem the slowing down of growth which india's experiencing right now. >> do you need more supply side reform if it pursues quantitative easing like you're calling for, won't it boost inflation, potentially hurt the currenc currency? >> i think india needs to do a combination of tightening risk and easing monetary before you start controlling long-term inflationary trend by controlling budget deficit. at the same tim you need to spot the investment cycle which requires easing of the monetary policy. >> what about changing regulations to make it easier not just for banks in india to expand and compete with each other but for foreign banks to enter the market? i know as a managing director of a major bank there, perhaps you enjoy thing, perhaps you enjoy the status quo. >> no, i think we are very happy to see global investment coming to india.

i think right now india needs more foreign, direct investment. india's continuing to see a pretty healthy investments. for 2012, india saw about $30 billion. january and february have seen a good amount of portfolio interest in indian equities. >> if anything, are you concerned about the money coming into the indian market? going back to what we were saying before? is there any sign that its global capital flows that are adding to india's inflation problem? >> at this stage, india needs capital flows. they're running a current deficit. and therefore, capital flows clearly are welcome. and india's going all out to woo capital flows. the finance minister went around the world to invite portfolio capital. india is very welcoming for global investors to come in. >> the u.k. prime minister is in india saying the country needs to do more to open its market to banks and financials. is he wrong?

>> i think he's right that we're open to more competition. at this point a lot of global institutions have their own challenges including challenges on capital. the financial system is extremely robust, particularly the private sector. and reasonably well capitalized. so compared to what's happening around the world, the private indian financial sector is well capitolized, robust -- capitalized, robust, and can take on growth. >> let's see if we can keep the pictures. we want to talk about your own company. you know of the biggest banks in india. what's your own biggest challenge for 2013? >> i think we are quite focused on ensuring the maintenance of credit quality and at the same

time decent loan growth. we see our bank being able to grow loans 20% to 25% per annum and have a very high level of focus on quality of credit which we like. and underwriting standards we observed. that is more generally a challenge in the indian banking sector. a lot of banks have significant exposure to infrastructure. we are relatively fortunate to have low exposure to infrastructure and have maintained a healthy loan book and growing at 2 0% to 25%. we think it is possible to marry a robust flip india with nominal growth in the 20% to 25% range and at the same time maintain decent margins and credit quality. >> building on the success you've had both with your company and personally -- and being so relatively young -- what's next for you? what's the next phase here? is it taking kotak

internationalflation? >> i think if you look at, say, india's nominal gdp which is regular -- i mean, which is the real gdp plus ininflation, india grows at between 12% to 15% nominal. it is possible for us as a financial institution to build a business in india which grows between 1.5 to 2 times nominally in gdp. and at that level, if you grow at 25% a year, my first principles -- you can double money every three years at 25%. therefore, that itself is a pretty interesting place to be in the world at this point of time. and therefore, we'll continue to grow both organically and inorganically in india. and very selectively outside of india where growth expectations we would have for investment should be similar at least to what we make in india.

>> and we'll leave it there. uday kotak, managing director. we wonder if warren buffett has comment given the prospects. we want to bring you minutes out of the bank of england hitting the wire. showing a 9-0 vote to keep the bank rate unchanged. interesting, it was 6-3 on keeping the quantitative easing program at 375 billion british pounds. king, fisher, and miles wanted a 25 billion pound increase. the vote was the biggest split since june, 2012. the monetary policy committee saw the case for more q.e. to help the economy rebalance. some of the tollways -- saw it as a more targeted form of q.e. but said drawbacks remained and that q.e. was the most effective tool to lower market rates. and that there were encouraging signs in funding for lending scheme. a reasonable chance of a modest

u.k. recovery in 2013, and the threat of a disorderly eurozone adjustment remains. james knightly is a u.k. economist at ing and joins us. what do you make of the 6-3 split? >> it's interesting actually. it's more than we expected really. expecting another 8-1 split with david miles being the main lead on the extra q.e. i guess it ties in with the comments we've had from the bank of england of late. the press conference last week was dovish. it's quite clear the bank of england are moving toward emp emphasizing looking through the target of above target inflation. i think we'll get another round of q.e. in the next few months or so. >> james, i'm looking at sterling. it's 153.77. it's fallen through the 154 level. significant from a psychological point if nothing else. we've seen other analyst suggest if it breaches 154, it could have plenty more downside to go. what -- i know you're not a currency analyst here. but does the reaction make sense to you and does a weaker

sterling here -- i guess, how would you interpret that? >> yeah. i think, you know, most people expected the ponlt of further q.e., especially with mark carney taking over and its relatively dovish leanings. for king to have shifted with fisher, as well, it's indicated that we're perhaps closer to kwan taf easing in the near term. of course that's more likely to add in sterling. given the fact that the u.k. could lose its aaa rating in the next month or two following the budget and also the uncertainty created by the u.k. e.u. referendum and scottish referendum on independence. there's a lot of negatives surrounding sterling now. i think it has further to fall. >> we'll leave it. there we want to get your thoughts on employment, as well. we'll be right back.

welcome back to "worldwide exchange." let's go straight to a look at what's happening with sterling. we have seen it drop below the 154 level. bank offen land minutes just -- of england minutes just showing fisher and miles would have liked to see a 25 billion pound increase in the size of the quantitative easing program. also comes as we learn that the u.k. unemployment rate held at

7.8%. slightly better than expected drop in jobless claims. average earnings growth remains weak. here's what's happening across the gilt curve. yields coming in at 2.4%. and james, at least the gilt yield is coming in. i suppose the markets would be most worried if the opposite happened, if it were to push out here. it's interesting to hear the bank of england say they think pound appreciation is expansionary. perhaps they look at this and are pleased. >> yeah. i think so. i mean, the way that they're going to get growth, given that austerity is continuing, household finances continue to be squeezed. rebalancing of the u.k. economy that we've long talked about. that means more exports and the plunge that we've seen in sterling really over the last month or so is beneficial for that argument. >> what about king being outvoted again when it comes to wanting to do more? we're learning that they had discussed rate cuts? >> yeah. it is interesting. happened before obviously. but i think, you know, by him pushing the case and if we do get any data disappointment it's

a clear sign that more q.e. will be on its way, especially with uncertainties in europe and the u.s. fiscal story come back and start to dent risk sentiment a bit. >> is it fair -- look separately at the average hourly earnings figures which show a 1.4% growth in december. some of the weakest growth since the 1.1% increase in the three months of december, 2009. is it really the case given the nature of -- the dynamics of britain's economy that quantitative easing is actually helping, or is it basically just continuing to rob from -- from consumer purchasing power? >> yeah. it's a difficult one because the data is contradictory in the u.k. you obviously have the u.k. which is in pretty dire straits in terms of economic activity, gdp is still 4% below previous levels. yet, of course, employment's at record highs. we saw another huge increase in u.k. employment. that sort of -- jobs are coming at a cost. you're not getting the wage writers coming through. it's sort of a little bit all over the place. it's difficult to discern a true

trend in what's going on in the u.k. as you say, q.e., it is -- it probably is going to be continuing. i guess from the bank of england's perspective, they're suggesting that most of the inflationary pressures coming from factors that are out of their control. i guess, you know, in terms of the administered price that's they were talking about, rise in utility bills, rise in education costs, as well. that's largely out of their control. they can't really do a lot of that with q.e. or interest rates. they're left really in a problem. they are focusing on the growth story. >> okay. and again, from their point of view, a weaker sterling here is going to boost growth. want to once again put up a picture of what we're looking at. james, thank you very much for his time this morning. now, half a percent, you see just that straight drop as soon as those minutes came out. the real question is what happens as market carney takes the helm over at the bank of england this summer. let's get a sense of broader market reaction, too. put up european markets and stocks and ftse rallying up 0.15%, not a mauj move.

xetera dax adding .1%. the cac and ibex are barely positive. the bond space, we mentioned what was happening with gilts. they were retrenching a bit on the news, 2.14%. weaker, as well, i should say potentially stronger given that it suggests investor demand. n spain and italy, seeing yields fall respectively. own the bund yield is moving a little higher this morning. now japanese prime minister abe is speaking out about a fund for the country. we have more on the nikkei live from tokyo. good morning. >> reporter: good morning. prime minister shinzo abe said a need for the government in the private sector to set up a joint fund to invest in foreign bonds has considerably declined. forex traders took the comment as a sign that the yen's strength has been corrected enough causing a wave of yen buying. speaking at a parliamentary session, abe added that the need

for the joint fund will likely diminish as bold monetary easing by the bank of japan gets off the ground. the comment is also seen as abe trying to send a message to market that he and his finance minister are on the same page. there have been speculation of raift between the two -- a rift between the two based on conflict over how far monetary easing should go. until today, abe made it clear at that creation of the fund is on its policy agenda, while the finance minister stated the government has no interest in having the doj buy foreign bonds. the difference in position is seen as reflecting the difference in preference for the next governor. abe's choice more radical, aso's more restrained. abe will finish his thinking on the new governor after he returns from his trip to washington this weekend. back to you. >> thank you. japanese officials weren't the only ones in asia touching on forex. south korea's incoming president told business groups that her administration is ready to take preemptive action to stabilize

the rising uan. it's put pressure on korean exporteders. over 13 months there. the yen has weakened, 13%, 14% against the won. and new zealand's bank chief told executives that the royal bank of new zealand will intervene when circumstances are right, using the official cash rate if needed. and on the back of that, the new zealand kiwi giving up about -- sorry, almost 1% against the u.s. dollar s. there anyone not trying to talk their currency down? a great question for our viewers perhaps. let's look at the agenda tomorrow. sony shares will be in focus after tonight's playstation event that's widely expected to unveil the p.s. 4. otherwise, it's all about corporate earnings especially in australia. amp, asx, fairfax, and aluna are names we'll hear from. in singapore, results are due from genting, sim corps marine

and costco. and companies in the fourth quarter seek a higher buyout offer. we have the numbers. >> reporter: dell came out with results last night that were better than expected. wall street was looking for $14.1 billion in revenue, they turned in $14.3 billion. dell did 40 cents. but they said they're not going to give guidance given that they're in midst, the process of trying to go private. silver lake partners trying to take dell private at $13.65 a share. many shareholders saying that's enough, you have to up it considerably in order for us to surrender our shares. and given that backdrop, michael dell was not on the earnings call. and the dell executives on the call said we're not going to talk about the buyout. clearly they wanted get that subject as far away from results as possible. the earnings call was short, less than a half-hour. shorter than usual. what did we learn from the call? a few thing. some of dell's growth markets

not growing. china in particular doing a little bit better than the others. dell described it as flattish. india and brazil down considerably. public, the public business which is government, largely hospital and schools but also federal government business. dell saying the margins were thinner than they have been in quite a while. some hope, though, dell executive saying that the corporate refresh would pick up again in the back half of the year. dell mentioning that around 40%, they estimate, of the install base of corporate p.c.s are still running x.p. and vista. and eventually those companies will have to upgrade to windows 7 or possibly windows 8 but upgrade to something because microsoft will stop supporting some legacy operating systems in april of 2014. back to you. >> lots of interesting developments in tech news. we'll actually have more on that coming up in the program. in the meantime, though, another executive is making headlines stateside. brian moynihan just got a late christmas present. the bank of america ceo saw his

pay jump 72% last year to just over $12 million. this as the company gave him a bigger package of restricted stock and performance-based shares. moynihan's base salary, $950,000. he didn't receive a cash bonus. bank of america shares last year rose 109%. they were, in fact, the top of the dow industrial average. yesterday added 1.3% in what was generally a risk-on day in the u.s. doing a lot of yelling does not appear to have used e.u. negotiators resolve a cap over here. lawmakers in the european parliament backed by germany and france argue that caps on banking bonuses will prevent reckless risk taking. however, talks have broken down with at least one witness claiming negotiators were shouting at each other. talks over the bonus cap will resume next week. on that note, we wonder, are the e.u. plans to increase salaries and lower bonuses in the sector an effective way to curb risktaking? let us know on "worldwide

exchange." keep me company. ross isn't around. e-mail worldwide@cnbc.com, tweet me, or wish roswell on his half-term break, @rosswestgate. will the smartphone get them back in the race? we'll have it when we come back. blam

welcome back to "worldwide exchange." is britain's visa system hurting the country's able to capture a piece of chinese growth? yes, says or guest who think the u.k. is missing out on vital tourists from emerging superpowers like china. he's calling for tover to have adopt a system that allows chinese travelers borderless access across europe. president and ceo of the world travel and tourism council joins me. >> good morning. >> first of all, what's the problem? >> it problem is the u.k. system is not fast enough or good enough to encourage visitors from places like china. china is a massive growth market, lots of people come from middle classes, 84 million traveling abroad. the u.k. gets 154,000 of 84

million customers. >> just 150,000 chinese travellers? that's extraordinary. >> the key thing is if you're a chinese visitor you can get a visa to travel 26 countries. why would you go through the process of more bureaucracy and paying more to get a u.k. visa just to come to london for two or tree days? >> right. -- or three days? >> right. why isn't britain part of the system in. >> there are lots of reasons, but if i give an analogy, the mexican government last year decided that if you had a u.s. visa, if you fought your way through the u.s. visa mechanism to get a u.s. visa, that was good enough for the mexicans. you didn't have to get a separatea. that's all i'm asking that china consider. they're a big market, there's estimates of losing two billion pounds a year through retail outlets. chinese tourists big spenders. >> at a time when they're looking for any way to increase growth why not pursue this

obvious one? >> when chinese come, they come in groups. at the moment, they're not coming to the u.k. if you look in the reverse direction in beijing and shanghai shanghai,they've decided people can go without a visa. they're trying to encourage them to stop on the way to somewhere else, but the u.k. is not listening to the approach. >> when we look at the olympics, that was such a way for britain to make its p.r. case to the world the way beijing did in 2008. it would theme is that would be an obvious peg to say, by the way, come visit, we're re-forming our visa system. why not? >> last year was such a showcase for the country. for china, it's a magnet to come here. given what happened in the u.s., the u.s. since 9/11 lost around $600 billion of tourist income because they were overly aggressive with their visa regime. within the boirvegz you had the

commerce department -- obama administration, you had the commerce department saying we want these people in and the state department saying, no, we want to keep them out. the only person that can resolve that debate in government is the president in that case or the prime minister. obama based on understanding the economic impact of people not coming to the u.s. basically instructed the state department to make changes. >> china isn't helping itself with all of the headlines with hacking and its involvement in spying potentially. maybe all allegations. but if there's political concern from the top about opening whether for tourism or work more generally, this is maybe a difficult time to make the sell. >> it's difficult. that's always the excuse that the interior ministries come out with. we produced research last year just inside the g20 countries. if the u.k., india, china, and u.s. relax some of these visa policies, it would create another five million jobs, bring another $60 million of income into the countries.

security forces and interior ministers need to do their work, keep the border safe. equally, they need to relax visas and automate them, make them electronic. >> there's talk that it might be scrapped -- >> i don't think that will happen. the agreement for visas is robust. as a consumer flying into the countries, it's perfect. you motor around all these countries, and you visit them. but you're not coming to the u.k. the u.k. is missing out big time on all of this economic prosperity. >> exactly. maybe the bank of england should instead of debating more quantitative easing should simply ask the government to revise its visa policy. >> would help. >> all right. maybe president and the ceo of the world tourism council will be next. thank you very much. hbc ramping technology to take on samsung and apple in the smartphone race. the company pinned hopes on the latest invention, the htc1, and hoping it will be set apart from other google android devices on the market. the smartphone uses new software to replace icons with

personalized news streams, social media, and videos. i caught up with the company's ceo, peter chow, at its product launch in london for an exclusive interviewer. -- exclusive interview. >> we are so confident in our product and wanted to be targeted, innovative, experience for the people who are wanting to find differentiation. >> how can you compete with the market and manufacturing muscle that apple and samsung have to fight back and win market share from the companies? >> we are confident to rely on our own innovation and provide unique differentiation to the market. and of course, we continue to innovate our marketing approach, try to be smart and nimble. >> how much will it cost? >> well, it costs a lot of money. and we are going to -- we are committed to invest. >> that was peter chow speaking at the htc launch event yesterday. the culture has generated buzz around this new device. the trouble, though, is how much

it will have to spend and invest in o to really get the message out against major rivals apple and samsung. speaking of developments in the mobile world, 4g, the next big thing. it's hoping -- governments hoping that it's the next big thing for their budgets, as well. britain, of course, when it auctioned off 3g spectrum hoped to raise tens of billions of dollars. the 4g auction did not go off as hoped, raising well shy of the $3.-- 3.5 billion-pound target that was included in chancellor osborne's last budget. with that spectrum auction coming at 2.4 billion pounds and following the results from everything everywhere that is the company e. suggesting that consumers aren't exactly banging down their door in order to get 4g access, the question about next week is how attractive 4g is and whether companies will see it worth the investment. spain is selling a new five-year dollar-denominated bond tomorrow as the recession-stricken country hopes to diversify its investor pool

and tap into the yield-hungry economy. the transaction set in the area of 300 basis points over mid swaps according to market sources. it would be the first spanish dollar denominated bond issue since december, 2009. greece is bracing for its first general strike of the year as workers renew protests against austerity measures. today's 24-hour strike will disrupt transport, close schools and all state-run offices. the industrial action comes ahead of a visit by the troika scheduled for next monday in which they'll check on the progress of greece's reform program. i suppose it's a good thing they're not there today. in bulgaria, meanwhile, austerity measures have toppled the country's government. the prime minister and his cabinet announced their resignation en masse earlier following nationwide protests at planned reform measures. the premier did not say if elections for july one brought forward. and french president hollande wrapped up his time praising reform efforts but warned that fiscal reform

couldn't be achieved by austerity alone. hollande's visit went largely unreported in local media because, yes, greek journalists were on strike. that's the common first lathrea connecting the austerity stories. give us your thoughts at worldwide@cnbc.com or tweet us. we'll keep an eye on the sterling/dollar, down .6%. just sitting there after the big sell-off following minutes from the bank of england. mervyn king is no ben bernanke, that seems to be the case. ahead on the program, u.s. consumers are feeling the pain at the pump as rising gas prices threaten to dent an already weak recovery. is there any relief in sight? great, everybody made it.

we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.

welcome back to today's wrecks. ross is away. i'm kelly evans.

these are your headlines from around the world. the bank of england reveals a larger than expected split on its seat repurchase program, sending -- its assets repurchase program, sending to lows. a drop in first half profit, but the outgoing and successor tells us the leadership change isn't related to the results. >> this is a process that started years ago, happens to coincide here today with a weaker pricing environment. but two totally unrelated events. dell's profits slump, but the company turns in strong enough results to support investor views that michael dell's buyout offer undervalues the p.c. maker. and the intern politician tells cnbc his movement is "unstoppable" in an exclusive interviewer. grillo says the italian political classes need to put their hands up and step aside.

it turned out to be a pretty strong day in u.s. markets yesterday after we got back from the holiday. the s&p 500, 1,529. five-year highs. the nasdaq and dow industrial average powering higher. the dow breaking back above that 14,000 level. and it's not just in the u.s. where we saw key thresholds. if you look at the cnbc ftse global 300, give a look at trade overnight. adding .25%, relatively quieter session in asia even though china has come back from the lunar new year holiday. in europe, it's also been a case of strengths for the ftse, the dax. today, trying to rally. there are individual names which are weighing on markets including lufthanza. let's start with lafarge. the world's largest cement maker. near the top of the stock 600 after swinging back to a profit in the fourth quarter, up 5.6%, helping the cac try to stay in the green. again, a different story for germany's lovea tanza.

-- lufthanza. it will go forward with a new order for planes down 5.5%. france telecom reported slowing earnings due to a price car in its home market -- price war in its home market. it was in line with citi's expectations, for example, but down 1.6% as investors sort through those results. also, kpn. take a look at this name. the company getting the go ahead from carlos slim's america mobile to go ahead with the rights offer. that's actually sending shares down 8.5%. people suggesting the company is weaker than earlier expected. in the broader sense, the european market, the cac cac trying to stay in the green but fractionally lower. the ibex down .2%. the xetera dax after a rally on better german investor sentiment, adding another .3%. and the ftse up .3% after the bank of england suggested it would review or would have liked to nature the size of its asset

purchase -- increase the size of its asset purchase product. german bunds down to 1. 5%. sterling was initially coming in, as well. now holding at 2.1%. for spain and italy, yields moving up so slightly, 5.17 and 4.38% respectively. the euro was also rallying this morning. over here, we'll show you adding about .2 a% to $1.34. the real story then, over there at the end. sterling/dollar down .6%. importantly below the 154 level. a lot of analysts say figure it breaches that, look out before. the next stop could be below the 152 range s. 150 in sight? we'll explore that. the dollar/yen giving up .2 a%, headed toward the -- .25%, headed toward the level. and we have a recap of asia from singapore. thank you. asian shares climbed to the highest level in 1.5 years on an

improving global outlook. who says the abe rally is over? the nikkei closed at a high despite a record deficit in january. abe said the next doj governor must have a strongwall to defeat inflation, if stoking easing hopes. toyota shares gained 1.7% after the nikkei reports the carmaker will ramp up production in april by 10%. japan tobacco lost 1% an reuters reports the japanese government will begin selling shares of the company in the next few days. in china, investigators shrugged off a slowdown. the rebound was .6% after losing for two sessions. environmental stocks surged on the hopes of more government suppo support. local media saying china will invest $56 million to control air pollution by 2015. shares in hong kong finished in positive territory, up . %.

no thanks to gaming stocks which weren't so lucky. revenue will be weak in february. today's outperformer was the kospi up nearly 2%. automakers' technology shares and brokerages led the rally as the prime minister said she's ready to take action on the rising wuan. another 4.5-year high, up .3% helped by banks. the major minor the ended weaker after reports of higher costs. india's sensex ended higher by .1%. back to you. >> thank you very much. idea we saw disappointing news on the home builder front. toll brothers may continue the string of weaker news. the company coming in reporting earnings of just three cents a share for -- for the fiscal first quarter. that compares with the estimate of ten cents that most analysts were looking for.

the revenue figures also shy, $42 million -- $425 million versus $500 million. they reported a backlog up about 66% in dollar terms and 57% in terms of volume if a year earlier. a healthy product pipeline. again, first quarter results for toll brothers which is a key homebuilder in the upper end of the market, well below expectations. keep an eye on shares today. also to watch, dell. fourth quarter earnings may add fuel to investor demands that the company seek a higher buyout offer. cnbc's john fortt has more. >> reporter: dell had estimates better than expected. wall street was looking for $14.1 billion in revenue, they turned in $14.3 billion. dell said they're not going to give guidance given that they're in the midst, in the process of trying to go private.

michael democrat and silverlake partners trying to take them hi many of the largest shareholders saying wait a minute, that's not enough, you'll have to up it considerably. in order for us to surrender our shares. given that backdrop, michael dell was not on the earnings call and executives who were on the call said we're not going to talk about the buyout. clearly they wanted to get that subject as far from the results as possible. the call was short, less than a half-hour. shorter than usual. what did we learn from the call? a few things. some of dell's growth markets not growing. china in particular doing better than the others. dell described it as flattish. india and brazil down considerably. the public business, government, largely hospitals and schools, but federal government business, dell saying that the margins were thinner than they've been in quite a while. some hope, though, dell executives saying that the corporate refresh would pick up again in the back half of the year. dell mentioning that around 40%

they estimate of the installed base of corporate p.c.s are still running x.p. and vista. eventually they'll have to upgrade to windows 7 or possibly windows 8. but upgrade to something because microsoft is going to stop supporting some of those legacy operating systems in april of 2014. back to you. u.s. retail gasoline price vs. climbed nearly 14% on the week to $3.75 a gallon, the highest level since last october. it's also in line with the aaa's daily report which shows the average price for a gallon of regular gas up more than 40 cents from last month's average. joining us now with more, managing director at jbc energy. thank you very much. >> sure. in the u.s., the story is getting more and more attention. not least because it seems to be hitting consumer purchasing power, confidence. should we expect gas prices to keep climbing? >> in theory, yes. i mean, it's exactly the right time of year. gasoline prices have always been

climbing ahead of the start of the driving season. so it's a preseasonal buying that is quite normal. you would expect that to start sometime in -- the second half of january, going through the beginning of the driving season. that means we will have the situation eventually till may. but of course high gasoline prices are not only a question of the attractiveness of gasoline and the interest of gasoline, it's also a function of the underlying crude oil market. because you have the crude oil price and on top the margin for gasoline. >> this is getting focus. we haven't seen huge moves to the upside in nymex. if anything, people are talking about the potential for it to go lower from here and offering people relief. that's clearly not happening. >> yes. i mean, let's say like this -- the crude oil market worldwide is now unreasonably high. i say unreasonably because the underlying fundamentals wouldn't indicate that. >> for prices for both nymex and brent here? >> well, first of all in brent. nymex has owned logic, more a u.s. logic which is related to

the supply and demand in cashing oklahoma landlocked area. if you talk about gasoline prices, international prices, you are talking about brent, brent-related crude oil which is about $20 higher than wto right now. now, the margins of gasoline very much would look on what is the brent price. and on top of that, the margin for gasoline. the u.s. still occasionally is importing on a net basis. >> especially around the east coast and other areas, correct? >> yes. first of all, the u.s. is importing bigger amount of gasoline. but they export a lot of gasoline. we see in the last two years, regularly in the fourth quarter of the year, the u.s. even becoming a net exporter. overall, you only can import gasoline if you are paying a market price. and so you have to pay a market price which is an international market price. and that would not really look on wti. >> what are the prospects for the u.s. weaning its reliance on imported gasoline?

i mean significantly weaning, say, this year? >> rather unlime. it's not -- unlikely. it's not in the industry of the oil industry. if it were not importing gasoline from abroad, it means they were self-sufficient. if they were self-sufficient, they only can ask for a margin which on top of wti which could be much lower. really, i think it doesn't serve anyone's interest if the u.s. were not importing or in the need of importing gasoline. >> it would serve consumers' interests. what you're saying is that these companies are able to maintain a higher gasoline price than they might otherwise because of what's happening with brent. because they can point and say, yes, but we have to import this costlier gas. >> well, i mean, it's effect -- they have the need to import. you know, if you look on the balances, we've talked 600,000, 700,000 barrels a day of imports. at the same time -- that's a regional exercise. as you rightly pointed out, in the east coast it would be importing. gulf coast refiners, a big

of the refinery, exporting big volumes into mexico, into latin america. partly into canada. nowadays you see the occasional cargo going to nigeria. the u.s. are very good in importing one thing and exporting a finished product. and making money out of that. >> but it is fair to say that the gas companies themselves are contributing to the higher gasoline prices above what the fundamental nymex price would suggest. >> yeah, i wouldn't be that hard on that. i mean, you -- you should not assume that you have an oil company out there that is able to control the market. >> right. >> so we're not there yet. i think the balances may flip at some point in time, but not yet. >> okay. john, we'll have more with you in a bit. first, we also want to talk about what's happening in italy. still to, come comedian-turned-politician grillo had a rally last night ahead of the election last night. find out what he said about why europe has failed. an exclusive cnbc interviewer

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welcome back. these are your headlines -- bank of england reveals a larger than expected split on quantitative easing sending the pound lower.

bhp appoint a new man for the top job after revealing a 40% drop in profit. dell reports better than expected earnings, potentially fueling calls for a sweeter buyout offer. we've been talking about prospects for a sahale boom. i want to pick up on the point because as you say, it seems that all the signs are pointing toward the u.s. being oversupplied with gasoline, oil products i should say. shale gas even. and yet consumers continue to pay more at the pump. >> yeah. number one, you have a trend. the trend is that the u.s. will need less gasoline. that is the overwhelming trend because efficiency improvements are also coming into the u.s. efficiency improvements you always have in europe. the u.s. are introducing more

efficient miles per gallon. in the years to come, there will be less need for gasoline. refiners on the other side have to adapt and will export on one side and will switch their refining capacity to export more diesel. still maintaining profitability for their refineries. shale, of course, is one of the components that is supporting the u.s. industry right now because it -- yields the lower crude oil price. crude oil prices in the u.s. are disconnected from the global market to some degree simply because you must not export crude oil from the u.s. you are having a slightly lower price right now. it's difficult also to export because a lot of crude oil is sitting in the mid continent. what is happening now, a lot of pipeline and tanker projects bringing crude oil to the markets, into the gulf coast, east coast, west coast, everywhere. >> above ground pipelines when the underground ones aren't available. >> anything, yes. whatever makes it worthwhile.

shale oil developments happening that helps the u.s. industry. we overestimated. we think the estimate for u.s. shale is overestimated, not taking into account the huge decline rates that are happening because you have about 50% of the initial production after five months. that means you have a massive decline rate on every well. if you then want to maintain production, it means you have to drill more wells initially that may work out. if you want this as a sustainable development, it's something not so easy to do. >> 50% decline rate, not something that most people are talking about, but extremely important. we'll get more from you in the months ahead. thank you for joining us. straight ahead on the program, sony gearing up for a big announcement in the big apple. will we get a sneak peek of the new playstation 4? what i'm banking on. to grow, we have to boost our social media visibility.

more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex.

there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight? or maybe, it's all of the above. and all the rest. am i home? nope. but it almost feels that way. homewood suites by hilton. be at home. sony is expected town veil new details on its playstation 4 game console. this more than six years after the launch of the p.s. 3. it is under pressure from nintendo's wii and xbox as well as online games. the new p.s. 4 will feature a

smaller touchscreen controller. sony is attempting to win market share from tablet devices. joining us, technology editor at "computing." welcome. >> thank you. >> there's a lot of competition, what are the stakes for this p.s. 4 launch? >> sony's been having a rough try over the past -- probably 20 years. they were big in the '80s, big in the '90s. everything they had at the top of the hardware market they had pulled away by the likes of apple with the music hardware and various cheaper tv manufacturers that can kind of replicate the quality that sony used to kind of sit on top with. so the playstation really has been the major hardware avenue for sony. so -- >> the playstation has -- how important is this device to the gaming market? >> the gaming market, it's one of basically the big three. you know, this generation, you've got nintendo, microsoft,

sony. next generation is supposed to be the same. it's just what's changed in the past seven years since the launch of the last load of kind of home consoles. of course, mobile has come in. tablets have come in. you know, people are spending a pound on the game on the ipad now rather than 40 pounds to play at home. >> is there a future for traditional gaming device? >> i don't think there's a future for the device as it is now. and i think, you know, the rumors that are coming out in both camps certainly, you know, from microsoft and sony is that, you know, including mobile in the plans now and having, you know, ipads work with games and mobile phones work with games, it's -- in the home is probably the way forward. so sony obviously has, you know, it has mobile phones. it has televisions. and may be able to parcel things together. you know, we could be seeing possibly a smart tv with a -- a

console built into it. >> right. >> stream games in. sony bought a streaming game startup called giki last year. they spent $380 million on that one. so they've clearly -- it's important to them. >> also important is the idea of total immersion in the game. we've seen from all type of dwiers makers, things that -- device makers, things that allow you to not touch controls and be surrounded by the environment. is it important for seasony to demonstrate some of those indovative features? >> probably. i mean, microsoft launched their connect, the motion camera controller, a couple of years back. it's done very well. sold very well. the sort of hardcore gamer is not necessarily adopting it because they're still kind of simple games that work with it. it's definitely a part of the market which has proven popular. there are, again, rumors that this playstation 4 will have a camera controller included. so they've got that one covered, i think. >> what about the xbox coming on its heels? is there a first mover advantage

here for the p.s. 4, or is there just the threat that whatever they do, microsoft would do something cool and steal their thunder? >> you know, a lot of people say that it's the fact the xbox 360 launched a year or so before the playstation 3 last time that that gave it the lead for a long while. so you could argue that if they were to come first and really get this one out this year, it could give them a step up. >> wow. lots of pressure. and the event later today, we'll keep an eye out for the device. the p.s. 4. maybe i'll even, who knows, try it for the first time. peter, technology editor at "computing." thank you very much. >> thank you. brian moynihan got a late christmas present. the bank of america ceo saw his pay jump 72% last year to $12.1 million. this as the company gave him a bigger package of restricted stock and performance-based shares. mountain hain's pace salary -- moynihan's base salary, $950 million. bank of shares rose $109% last

year, the top performer in the dow jones industrial average. and yelling didn't help resolve a cap on bankers' bonuses discussed here. lawmakers in the european parliament backed by germany and france argue that caps on bonuses will prevent reckless risktaking. still, talks have broken down with a witness claiming negotiators were shouting at each other. talks over the bonus cap are due to resume next week. we asked you earlier, are the plans on bonuses which include increasing salaries and lowering the bonuses themselves an effective way to curb risk-taking? john tweeted, it would be nice if other jobs offered big bonuses. maybe they can call the industry something else to escape the bonus cap. jeff tweets that he refers shareholders and stronger boards to limit salaries rather than governments. keep your responses coming. if you want to respond to that or anything you've heard. a lot of people talking about -- our segment with johannes beneni

and even as america exports oil and oil products, gas prices rising at home. tweet us, cnbcwex, and@kel and @kellyevans. days before spending cuts go into effect. and the u.s. playing the sequester game game. we'll look at the standoff and its effect on the committee and a look -- the economy and a look at the boards.

welcome back. the bank of england reveals larger than expected split on its asset program sending sterling to fresh multi-month lows. dell's profits slump but the company turns in strong enough numbers to suggest that the p.c. maker is undervalued. a new chief executive following a 43% drop in first half profit. the outgoing ceo and sexor say the change isn't related to the results. >> this is a process that start started years ago. happens to coincide with a weaker pricing environment. but two totally unrelated events. and comedian-turned-politician beppo grillo says his movement is

unstoppab unstoppable. he says the italian political classes need to put their hands up and step aside. the minutes from last month's federal reserve meeting will be released at 2:00 p.m. today. traders highly anticipating the point. after all, the december minutes rocked the market when they showed several fomc members wanted the third round of quantitative easing to be slowed or stopped by the end of the year. will it be a repeat? u.s. economics editor at "the economist" joins me now. greg, good morning. >> hi, how are you? >> great. the interesting thing about the fed minutes the last time is the way they set the tone for trade. in retrospect everybody said, look, it was an overreaction. do you think knowing that, knowing the reaction, do you think the fed might be using minutes as a way to indicated that they're going nowhere fast?

>> the minutes surprise you because you don't know what they talked about but failed to disclose after the last meeting. that was the days december. i'm not expectation market-moving set of minutes today. the meeting itself was routine without big chanchlge to their statement or anything. what the market is going to be looking for is further texture around the schedule for quantitative easing. does it continue to the end of the year, does it stop sooner or go longer? in particular, two things i would like it hear more about. what do you think in terms of the costs, number one, of financial instability. we had an interesting speech from governor jeremy stine warning it the possibility of overheating in credit markets as a result of these low interest rates. also, the possibility that a few years down the road as the fed exits from the program, they'll stop paying profits to the treasury. some fed officials are worried about that. those are the things i'll be looking for more texture on. >> greg, we're obviously going to watch the dollar, as well. to compare and contrast, the bank of england came out, mervyn king, governor, outvoted 6-3 on

increasing the size of their quantitative easing program. just the fact that there was this split with three people pushing for more had this immediate impact, sending the pound below 154 to the dollar. the bank of england saying they say the falling pound as stimulative even though average hourly earnings continue to lag the inflation rate. over in the u.s., is there a m similar dilemma? >> not so much. in the case of the united states, as you know, the notion of currency wars started up about two years ago in the federal reserve kicking off the second round of quantitative easing. that sent the dollar down fairly sharply. in some sense, the japanese and the british are only catching up. exercising their own quantitative easing and getting their salvo in on the so-called currency war. it actually gets into sort of a good place. you now have the three major central banks all trying to ease policy and stimulate the economies with monetary expansion. you know, i thought the minutes from the bank of england were really interesting.

comes on the heels, i think, of a week ago when the bank's inflation report said they expected inflation to be above the 2% target for two more years. and in spite of that, three members of the monetary policy committee including the outgoing governor are thinking of easing policy further. i think it speaks to a real sea change in how central banks are downplaying the significance of inflation and uprating the importance of employment and output in terms of their policy. >> absolutely. because we separately learned that employment in the u.k. hit another high. and the u.s. kind of a similar story. inflation has not been as strong as it has been in the u.k. but the employment side of things have held up all right. as other countries -- today we've got people from korea to new zealand to japan again out there talking about a weaker currency. we've got what happened with the pound just now. will the fed look to actually target a lower dollar here? >> absolutely not. absolutely not. that is a line the fed will not cross. they won't cross it because, number one, there's a long tradition in the united states

that the fed leaves that to the treasury department. and the treasury department's not going do it either. i mean, every opportunity it gets the treasury, whether it's the outgoing secretary, tim geithner, or his remakes, jack lew. they say -- replacement, jack lew. they say -- it would be the height of hypocrisy if the united states stepped in and started influencing the dollar. all that said, what they've -- what the americans have said and what the g-7 said last week is that insofar as these monetary policies are aimed at bolstering domestic demand, not driving the currency down, they're okay. so we'll see more of that. >> right. almost a different form of stimulus. speaking of which, on the fiscal side, there are nine days before automatic defense and spending cuts go into effect. yes, the sequester. with the deadline looming, the budget fight between president obama and congressional republicans has shifted from how to stop the cuts to who to blame if they happen. and it's -- amid all this, stocks are hitting multi-year

highs, completely shrugging it off it would seem. >> i know. it looks to me like they're kind of running on some monetary fumes or something like that. i mean, the economic data in the united states has not been that great. retail sales, industrial production, employment all weaker in january than they were at the end of last year. consistent with the payroll tax hike. now these higher gasoline prices taking the wind out of the consumers' sails. frankly, i don't think the market had full economy to grips with the fact that the sequester is almost certainly going to happen. at least for a few weeks. now, the positive side if there is one is that obama and the republicans in congress both agree that the sequester is a terrible thing and shouldn't happen. so you sort of look and say, well, if you both agree that this shouldn't happen, surely there must be a way to get to that point. well, maybe so, but first they have to -- i don't know, there's like a 12-step program involved. first of all, they have to go through denial and anger. then maybe a few weeks of actual shutdown of the government before they come to some sort of ugly agreement to lift these -- lift the sequester. >> sequester avoiders anonymous

or something like that. >> yeah. i'm signing up for that, kelly. i've had quite enough of fiscal cliff i think for a lifetime. >> exactly. i mean, if as you say this could happen for a couple of weeks, it would turn around and face the march shutdown, what actually is your baseline view, greg as to how many of the cuts go through and what it means for growth this year? >> i think my baseline view is that we do have a sequester that kicks in for probably some short period of time. i would not say the full remainder of the fiscal year, but at least maybe a month or so. i think it takes a little bit of energy out of the economy this year. i do think that whatever agreement we have to get past a sequester will also include a fix so that we do not shut down the government at the end of march or allow a -- another debt ceiling crisis. i think it will be more of the same. like muddle through without that, you know, cathartic relief from all the fiscal uncertainty. but neither a catastrophe. >> all right. and stocks continue to run on monetary fumes as greg said. greg, thank you again for your time. great to see you this morning. >> all right. thanks, kelly.

the major news event in europe, the italian elections on sunday. italy's caretaker prime minister mario monty has come out swinging again the former premier, silvio berlusconi, saying he didn't maintain promises made in the past and that the new governor could govern well. this as the foul mouthed comedian/politician whipped a route into a frenzy into a rally in milan:we have more. >> reporter: supporters of the five-star movement out in force. some estimates suggest up to 100,000 people gathered in the square to hear him speak. he was treated like a rock star by the supporters that surrounded him as he left his camper van, the tsunami tour is what he's allegedly on right now. he certainly is gathering and moplizing on this rising

sentiment -- monopolizing on this rising sentiment to rule out the old guard. he said he won't form any kind of coalition after this election. and he's also suggesting that he won't be the leader of this party due to a criminal conviction not allowed in his movement. i asked when i spoke to him exclusively yesterday what is the future for this party after the election. listen to what he had to say. >> translator: this is an unstoppable movement. it's an epidemic. the current political class has to come out with their hands up. no, i'm not anti-europe, i'm for a different europe. this one has failed with different economies that's led to crisis in a number of countries. we're about a different europe. the problem isn't being inside or outside the eurozone, the problem is debt. >> reporter: given the people we've been talking to, i think it's dangerous to underestimate the force behind the five-star movement. ultimately, what we're looking

at in this election is a coalition forming between mario monti center tryst and the center left party -- centrist and the center left party. they recognize the importance of forming a stable coalition after this weekend's elections. i think it's interesting, though, one of the articles in the press this morning suggesting that blackrock is going to be sending a party here just to talk to pollsters and assess the risks surrounding this election. from the people that we've spoken to, officials and the public, a suggestion perhaps that it is going to be more difficult than it seems to bring all parties on both sides of these coalitions together ultimately to form a government. >> julia chatterly there from milan where she will be until that election on sunday. she actually told us earlier this morning that in some ways covering this remind her in terms of seeing the people in the streets of being in greece. and on that note, we want to bring pictures from greece today where anti-austerity strikes have more or less brought the country or at least athens to a standstill. it's a 24-hour strike that comes

ahead of the troika's return trip to assess conditions on monday. it is the first general strike of the year. and you can hear the atmosphere as that gets underway. as tesla motors gets in gear to report earnings, phil lebow has taken it for a test drive. find out what happened when he reported the infamous new york times trip. ♪

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welcome back to "worldwide exchange." these are your headlines -- the bank of england reveals a larger than expected split on quantitative easing sending the pound sharply lower. bhp send a new man to the top job after there's a 40% drop in profits. dell reports better than expected, potentially fueling calls for a sweeter buyout offer. also, tessly -- tesla motors reports numbers after the closing bell. the luxury carmaker has had a fair amount of news after a test drive by a "new york times" reporter led to a spat with the high-profile ceo. our phil lebeau decided to re-create the test drive to see

if tesla's mileage claims hold up. >> reporter: well, after more than eight hours of driving, 445 miles and a couple of stops to recharge, the tesla model s, we have made. we are pulling into the tesla store. just outside of boston. actually, we're in natick, massachusetts. as we pull in, one thing stands out about the drive. the tesla model s in terms of performance and what it delivers on a long drive, it does meet expectations. you have to passion -- you have manage your expectations. this is the 85-per kilowatt battery in this tesla, this has a range of 265 miles. we did the longest stretch, a stretch of more than 200 miles between delaware and a recharging station in massachusetts -- in connecticut, and it performed as expected. the bottom line, the tesla model s, while it is primarily a vehicle that people will be driving in smaller areas, in cities where they know they're only going to be driving fewer

than 100 miles, the bottom line, on a long drive the tesla model s does perform. that's the story from here outside of massachusetts. we complete our tesla model s test drive. >> not a bad assignment to re-create the test drive. i miss roadtrips. in other news this morning, herbalife's fourth quarter profit rose 12%, beating forecasts as the nutritional supplement company is also raising its 2013 earnings outlook. herbalife, of course embroiled in a battle between activist investors, confirms the sec has asked for information about its business operations. the "wall street journal" last month appropriated the sec had opened an informal probe. ackman claims the company is a pyramid scheme. look at the shares. they are adding .6%, having given up 15% over the last three months. boeing's engineers union is split on whether to approve the company's latest contract offer.

the professional members who perform the main engineering duties on boeing's planes voted nearly to accept it while a smaller group of technical workers are rejecting the contract. both groups have voted in favor of authorizing the union to call a strike. and united airlines is dropping the boeing 787 dreamliner from its schedule through the end of march. united has six dreamer liners. air india says it's hopeful to have the six dreamliners back in the air in april. on that news, boeing shares are trading down about .4% in frankfurt this morning. given that the dax is up, they are underperforming. a u.s. judge has declined to make a quick ruling on green light capital's request to block a proxy vote at apple's shareholders meeting next week. green light is opposed to a measure that would change the rules for issuing preferred stock and filed lawsuit. the judge says greenlight produced enough evidence to indicate it could succeed. he's only being asked to determine whether holding the

vote would cause irreparable harm to greenlight's case which he's questioning. apple shares are down by .2% today. look at that. still extraordinary to look at. $342 share price, giving up 21% in the past three months. coming up, tensions running high between washington and beijing ads the u.s. has blame -- as the u.s. has blame to the east on cyber-theft. analysis on the hacking allegations when we come back. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities.

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more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex. u.s. futures are trying to build on gains from yesterday. the dow breaking through 14,000, adding five or six points more today. the s&p 500, 1,529. the rally supported by what we've seen out of asia and europe overnight. although trade has been mixed.

the ftse 100 pushing through 6,400, adding .4% after bank of engla england. the cac and ibex slightly weaker. how do you make money in these markets? here's what our guests have been telling us this morning -- >> i think it's difficult for investors to move to other stocks because the stocks worth investing in are on higher ratings. there are a very small group of tech shares that you should be in, and they're higher rated. if you're looking to invest in tech shares on the basis of low p.e., you're not going to have much success. a lot of people out there that expect dollar/yen to keep rising, go through 100 and who knows where it could go. from the -- fundamentally when you look at the underlying reasons for the dollar/yen rally, i know people give a lot of reasons. many of them aren't particularly well founded.

we like novartis. it's pretty straightforward. they're, in my opinion, the only company to have general innovation. before the u.s. agenda, a recap of the german bund auction. 1.66% yield on the ten year, that is its highest funding cost since april, 2012. the increase in bond yields also does mirror the general increase in equities across germany. and the rebound to some degree in felt inner sentiment -- in investor sentiment about growth. 1.66% for the bund auction. the january ppi report will be out at 8:30 eastern. they're expected to show a .5% increase, only .2% when you exclude food and energy then january housing starts and minutes from the fed meeting. we spoke about that earlier. and st. louis fed president james bullard and san francisco's john williams will both be speaking this afternoon.

as for earnings, look for devon energy, dish network, mgm resorts, and sodastream before the open, then crocs and tesla after markets close. the obama administration is expected to release a report today under which the u.s. government would consider fines or trade actions against china or any country found guilty of cyberespionage. this comes as beijing disputes the findings of a security firm that a secret military unit is responsible for a recent slew of hacking attacks on u.s. companies. the latest possible victim is apple. the company says a small number of macks at its -- macs at its offices were hacked, although it appears no data was gleaned or stolen in the attack. for more, john reed, national security staff writer at "foreign policy" joins me. thanks for your time. and first of all, you know, this report, does it basically bring to the public issues that people behind closed doors have been concerned about for some time? >> exactly. confirms --des evidence of a problem that we've known about for a long time. that's this broad chinese

government-backed campaign of cyber-espionage against a number of u.s. targets from businesses where they want to -- to leapfroghead technologically to looking for government secrets. >> china's denying it, though. >> they always have. that's why everybody said it's important to find evidence. be able to confront them and show, boom, that you're doing this, look at. this many know they'll deny, and it may be the start of u.s. confronting china with evidence. the government hasn't even done it yet because the government, there are a lot of diplomatic issues associated with this. you don't want to give away your spycraft secrets. >> john, how much of this is happening behind closed doors, and how much now that this report has been made public, now that we are hearing from companies like apple and others, high-profile examples of security breaches, is now going to play out more in the public sphere. >> right. that's -- that's what we're seeing. the beginning, the very beginning of this. companies may start coming forward, you know. a year ago, companies didn't

want to come forward. they didn't want to restleel they had been hacked. -- reveal that they had been hacked. there's increasing pressure on the u.s. government to divulge, you know, what evidence it has that shows china has been conducting a massive espionage campaign again against the government and against private businesses. so everybody from the private sector to capitol hill is pressuring the government to come forward and confront china more aggressively on this. >> at the same time, china's such an important source of sales of demand for multinational u.s. companies. so it's almost as if they're equally concerned perhaps about raising some of the issues that they've been dealing with. wondering if there won't be a kneejerk response by regulators here that could harm them. >> that's the other issue. and there's no doubt that this is going to be used on the hill to push cybersecurity legislation. that's up there right now. and again, the white house is going to highlight that this is another example of why the cybersecurity executive so ordered needed.

>> john reed, national security staff writer at "foreign policy." ahead of the report we're expected later today. appreciate your time. an issue that will plague not just companies in the u.s. but worldwide over the months ahead. thank you for joining us on the program today. can i help but show you the sterling chart yet again before we go? keep an eye on this one. it's one to watch. more on the market update in "squawk box." we'll hand it over to the team in the u.s. now. we'll see you back here tomorrow morning. have a great day.